HNA Group says committed to disclosure on future shareholding shake-ups

FILE PHOTO: The HNA Group logo is seen in this illustration photo June 1, 2017. REUTERS/Thomas White/Illustration/File Photo

HONG KONG (Reuters) - HNA Group Co is committed to disclosures on future changes of its shareholding structure, the head of the conglomerate’s international unit said on Friday, as long-standing concerns persist over who runs one of the most acquisitive Chinese buyers of overseas assets.

HNA has been in the spotlight together with other Chinese conglomerates for the billions of dollars they have splashed on marquee real estate properties and global brands, as Beijing cracks downs on what it deems excessive deals.

The privately-owned group, which has entered into $50 billion of deals over the last two years, however, doesn’t expect any changes to its shareholding structure in the near future, said Wang Shuang, the group’s chief investment officer and chief executive of its international unit.

“If you are a private company, basically you do not need to disclose who is your shareholder. But since HNA is already a global conglomerate, our partners and investors, they are curious about who’s controlling HNA Group,” he told a conference in Hong Kong.

The sprawling conglomerate in late July announced a shareholding shake-up, saying a new New York-based charitable foundation would act as its single-biggest stakeholder with a 29.5 percent stake, in a bid to quash concerns over its ownership.

“The reason why HNA Group tries to be transparent is because we have nothing to hide,” said Wang, adding the group will disclose such ownership changes on a regular basis.

However, HNA did not provide details at the time of how the shares were placed in the new charity’s hands, how the overall foundation would be run or how it would vote or use its shares.

While uncertainty over political and economic conditions has slowed the pace of outbound deals from China, HNA will continue to look for potential targets that could create value for the group, Wang added.

The HNA executive said the conglomerate looks at many different companies before making an acquisition, with the success rate of deals at only 5 percent of what it examines.

Meanwhile, he said HNA welcomes Beijing’s new guidelines on overseas investment, which supports investments in sectors including high-tech manufacturing, while restricting deals in sectors ranging from property, hotels and entertainment to sports clubs and films.

“This is a guideline for us to basically have a good picture of what you can do and what you cannot. The most uncertainty is basically there’s no direction for you. Once there’s a direction, you can find ways to follow.”

Apart from Chinese banks, Wang said, HNA was also working with several foreign investment banks. JPMorgan, UBS, Credit Suisse, Barclays and Deutsche Bank were the main global banks, he said, pushing back against media reports that some Wall Street banks were shying away from its business.

Reuters reported earlier this week that Goldman Sachs had suspended its preliminary work on a planned U.S. IPO for HNA’s unit Pactera. HNA said that it had not appointed any investment bank to assist in the IPO and all joint projects between the company and Goldman are “functioning normally”.